A credit shelter trust can be revocable or irrevocable, as well as living or testamentary. It is often used in order to protect assets from the case where one spouse dies and gives their assets to the other tax free, but then the surviving spouse dies and any of the assets that they possess will be taxed above the exemption level. Therefore, this trust allows spouses to avoid paying estate taxes that would normally be taken out of the assets after the death of the second spouse.

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